The Blogs that appear on this page may be sourced from outdated material so please seek appropriate professional advice. The blog material is in no way intended to be personal financial planning advice.

Catherine's Chat

Wholistic Financial Solutions provides information and updates regarding the property investment industry. Learn more from Catherine's chat here.

AMP Federal budget 2016

Friday, May 06, 2016

 2016-17 Federal Budget- Client Briefing     


4th May 2016                                                                    


Federal Treasurer Scott Morrison put forward a number of proposed changes, mainly around contributions to superannuation and taxation, in his budget speech last night. Here’s a brief roundup of what the proposals could mean for you—whether you’re starting out in your career, taking care of family, on the cusp of retirement or enjoying life after work. Remember, proposals are not set in stone and could change as legislation passes through parliament.




1. Lifetime cap for non-concessional superannuation contributions

Proposed effective date: 7.30pm (AEST) 3 May 2016


Currently, the non-concessional contributions cap is $180,000 per person, per financial year. If you are under age 65 at any time in the financial year, you can make a non-concessional contribution of up to $540,000 under the bring-forward provisions. The government proposes to replace the current contributions cap with a $500,000-lifetime non-concessional contributions cap. This lifetime cap is proposed to commence at 7.30pm (AEST) on 3 May 2016. The cap will be indexed to average weekly ordinary time earnings (AWOTE). The lifetime cap will take into account all non-concessional contributions made on or after 1 July 2007. Contributions made between 1 July 2007 and 3 May 2016 will be counted towards this lifetime cap. However, contributions made before the commencement of this measure, that is 7.30pm (AEST) on 3 May 2016, will not result in an excess. Excess contributions made after commencement will need to be removed or be subject to penalty tax.


2. Reduction of the concessional contributions cap

Proposed effective date: 1 July 2017


Currently, the standard concessional contribution (CC) cap is $30,000 per financial year. A higher temporary concessional contributions cap of $35,000 (unindexed) applies if you are aged 49 years or over on 30 June of the previous financial year. The government is proposing to reduce the annual cap on concessional superannuation contributions to $25,000 for everyone, irrespective of their age.


3. Reduction to Division 293 tax threshold

Proposed effective date: 1 July 2017


From 1 July 2017, the government has proposed to lower the Division 293 threshold (the point at which high-income earners pay an additional 15 per cent tax on contributions) from $300,000 to $250,000.


4. Allowing catch up concessional contributions

Proposed effective date: 1 July 2017


Currently, the concessional contributions cap is applied on a ‘use it or lose it’ basis. That is, the unused amount of the concessional cap cannot be carried forward. From 1 July 2017, the government will allow eligible individuals to make additional concessional contributions where they have not reached their concessional contributions cap in previous years. This option will only be available to those individuals with a superannuation balance less than $500,000. It is proposed that the unused amounts will be carried forward on a rolling basis for a period of five consecutive years with only unused amounts that accrue after 1 July 2017 being eligible. The proposed measure will also apply to members of defined benefit schemes.


5. Removal of the work test to contribute to superannuation

Proposed effective date: 1 July 2017


Currently, individuals aged 65 to 75 who want to make voluntary superannuation contributions need to meet the work test. People aged 70 or over are also currently unable to receive contributions from their spouses. The government will remove these restrictions for all individuals aged less than 75, from 1 July 2017.


6. Making it easier to claim tax deductions for personal super contributions

Proposed effective date: 1 July 2017


Currently, if you are engaged in employment activities during a financial year, a deduction for personal superannuation contributions can only be claimed where the ‘less than 10% rule’ is satisfied. This rule broadly requires that the income attributable to employment activities does not exceed 10% of income from all sources. 2016–17 Federal Budget – client briefing 4 May 2016 The government is proposing to abolish this test, allowing all individuals up to age 75 to claim an income tax deduction for personal superannuation contributions. If legislated, this will effectively allow all individuals, regardless of their employment circumstances, to make concessional superannuation contributions up to the concessional cap. Observations: –– This measure assists those whose employer may not provide the ability to make salary sacrifice contributions to super. It will also assist those who are partially self-employed and partially wage and salary earners.


7. Introducing the Low-Income Super Tax Offset (LISTO)

Proposed effective date: 1 July 2017


From 1 July 2012, individuals with an income of up to $37,000 automatically received a government contribution of up to $500 paid directly into their super. However, this Low Income Superannuation Contribution (LISC) will not be available in respect of concessional contributions made after 1 July 2017. From 1 July 2017, the government is proposing to introduce a replacement – the Low Income Superannuation Tax Offset (LISTO). The LISTO will provide a non-refundable tax offset to superannuation funds, based on the tax paid on concessional contributions made on behalf of low-income earners, up to an annual cap of $500. The LISTO will apply to members with adjusted taxable income up to $37,000 who have had a concessional contribution made on their behalf.


8. Making spouse contributions more attractive

Proposed effective date: 1 July 2017


Currently, if you make contributions into your spouse’s account you are entitled to a tax offset of up to $540 if certain requirements are met. One of the requirements to qualify for the maximum offset is that the receiving spouse’s assessable income, reportable employer superannuation contributions, and reportable fringe benefits in the financial year must be less than $10,800. To be eligible to receive the contribution, the receiving spouse must currently be: –– under age 65, or –– aged between 65 and 70 and has met the work test for the financial year in which the contribution is made. The government proposes to: –– remove the work test restrictions for all individuals aged up to 75, and –– increase access to the spouse superannuation tax offset by raising the lower income threshold for the receiving spouse to $37,000 (cutting out at $40,000).


9. Changes to the taxation of Transition to Retirement (TTR) income streams

Proposed effective date: 1 July 2017


The internal earnings within a superannuation account on the amount used to purchase a pension are currently tax-free. This will no longer apply to transition to retirement income streams from 1 July 2017 should the proposal go ahead. This means that earnings on fund assets supporting a transition to retirement income stream after this date would be subject to the same maximum 15 per cent tax rate applicable to an accumulation fund.


10. The introduction of a $1.6 million superannuation transfer balance cap

Proposed effective date: 1 July 2017


From 1 July 2017, the government is proposing to introduce a $1.6 million transfer balance cap. This cap will limit the total amount of accumulated superannuation benefits that an individual will be able to transfer into the retirement income phase. Subsequent earnings on pension balances will not form part of this cap. If you have superannuation amounts in excess of $1.6 million, you will be able to maintain this excess amount in a superannuation accumulation account (where earnings will be taxed at the concessional rate of 15 per cent). A tax on amounts that are transferred in excess of the $1.6 million cap (including earnings on these excess transferred amounts) will be applied, similar to the tax treatment that currently applies to excess non-concessional contributions. Fund members who are already in the retirement income phase with balances above $1.6 million will be required to reduce their retirement balance to $1.6 million by 1 July 2017 should the proposal go ahead. These excess balance amounts may be converted to a superannuation accumulation account.


Taxation – general


11. Changes to marginal tax rates

As speculated, a tax cut has been proposed at the current $80,000 taxable income threshold. As a result, marginal tax rates for resident taxpayers are proposed to change as follows:

                 2015–16                                                               2016–17

Income ($)              Marginal tax rate (%)                        Income ($)           Marginal tax rate(%)


 0-18,200                                           0                           0-18,200                                      0

18,201-37,000                                  19                           18,201-37,000                             19

37,001-80,000                                32.5                          37,001-87,000                           32.5       

80,001-180,000                                37                           87,001-180,000                            37

>180,000                                         47                           >180,000                                    47


Notes: Medicare levy may also apply, 47% tax rate includes Temporary Budget Repair Levy (TBRL, additional 2%). The TBRL is due to expire from 30 June 2017 and has not been extended in this budget. 


–– The Low Income Tax Offset (LITO) remains unchanged which gives resident taxpayers an effective tax-free threshold of $20,542 in 2016–17.

–– Indicative tax cuts: If you earn $87,000 or more per year, you would get a maximum tax cut of $315 under this measure. If you earned less than $80,000 there will be no change to your tax      calculation.


Taxation – small business


12. Increase in small business entity turnover thresholds

Proposed effective date: 1 July 2016


Starting from 1 July 2016, the government proposes to increase the small business annual aggregated turnover threshold from $2 million to $10 million for certain small business concessions. From 1 July 2016 these small business concessions include:

–– the lowering of the small business corporate tax rate (see below)

–– for all businesses with annual aggregated turnover of less than $10 million simplified asset depreciation rules, including immediate tax deductibility for asset purchases costing less than $20,000 until 30 June 2017, and

–– other tax concessions such as the extension of the FBT exemption for work-related portable electronic devices and the immediate deduction of professional expenses.


–– The current $2 million turnover threshold, or alternative $6 million net asset value test, will be retained for access to the small business Capital Gains Tax concessions.


13. Lowering the company tax rate to 25 per cent

Proposed effective date: 1 July 2016


The government proposes to reduce the company tax rate to 25 per cent by 2026–27. Initially, the tax rate for companies with an annual aggregated turnover of less than $10 million will be reduced to 27.5 per cent from 1 July 2016.


14. Unincorporated small business tax discount

Proposed effective date: 1 July 2016


For small businesses, that are not companies, the government proposes to extend the unincorporated small business tax discount. From 2016–17, the discount will be available to business with aggregated annual turnover of less than $5 million, up from the current threshold of $2 million. The discount on tax payable on business income will be increased to 8 per cent, up from the current 5 per cent, but the maximum discount available will remain at $1,000 per annum. Over the next decade it is proposed to further expand the discount in phases to a final discount of 16 per cent, with the existing $1,000 maximum discount per individual for each income year to remain.


Families and social security


15. Deferral of reforms to childcare payments

Proposed effective date: 1 July 2018


As part of the May 2015 Federal Budget it was proposed that a new single Child Care Subsidy (CCS) would replace the Child Care Benefit, the Child Care Rebate and the Jobs, Education and Training Child Care Fee Assistance from 1 July 2017. This measure has not yet been legislated and the proposed start date will now be deferred until 1 July 2018.






What you need to know

Any advice in this document is general in nature and is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of this advice having regard to those matters and consider the product disclosure statement before making a decision about the product. AMP Life is part of the AMP group and can be contacted on 131 267. If you decide to purchase or vary a financial product, AMP Life and/or other companies within the AMP group will receive fees and other benefits, which will be a dollar amount or a percentage of either the premium you pay or the value of your investments. You can ask us for more details.

What is Financial coaching services

Thursday, February 05, 2015

A new and fast growing advisory service - Financial coaching services


Financial coaching definition


So what is Financial Coaching?  The industry is so new there is no accepted financial coaching definition.  One can turn to Wikipedia for a definition of Coaching.  Coaching is defined as ‘training or development in which a person called a "coach" supports a learner in achieving a specific personal or professional goal’  So how can this definition be expanded to a Financial Coaching Definition? 


Wiki further goes on to outline a sub category of Financial Coaching being ‘an emerging form of coaching that focuses on helping clients overcome their struggle to attain specific financial goals and aspirations they have set for themselves. At its most basic, financial coaching is a one-on-one relationship in which the coach works to provide encouragement and support aimed at facilitating attainment of the client's financial plans. Recognizing the array of challenges inherent in behaviour change, including all too human tendencies to procrastinate and overemphasize short-term gains over long-term wellbeing, they monitor their clients’ progress over time and hold the client accountable. This monitoring function is hypothesized to boost clients’ self-control and willpower. Previous studies in psychology indicate that individuals are much more likely to follow through on tasks when they are monitored by others, rather than when they attempt to ‘self-monitor’. Although early research links financial coaching to improvements in client outcomes, much more rigorous analysis is necessary before any causal linkages can be established. In contrast to financial counsellors and educators, financial coaches do not need to be experts in personal finance because they do not focus on providing financial advice or information to clients.


The obvious flaw in Wiki’s Financial Coaching Definition is that it states that financial coaches do not need to be experts in personal finance because they do not focus on providing financial advice or information to clients.  It is correct that Financial Coaches cannot provide Financial Planning advice as they would need to be Licensed Financial Planners to do so. However, I fail to see how a coach can coach someone on their financial life without having any expertise in personal finance issues.  Even the term personal finance is ambiguous.  The term ‘personal finance’ financial management which an individual or a family unit is required to do to obtain, budget, save, and spend monetary resources over time, taking into account various financial risks and future life events.  When planning personal finances the individual would consider the suitability to his or her needs of a range of banking products (checking, savings accounts, credit cards and consumer loans) or investment (stock market, bonds, mutual funds) and insurance (life insurance, health insurance, disability insurance) products or participation and monitoring of individual- or employer-sponsored retirement plans, social security benefits, and income tax management. Are these not highly specialised areas in which advisors need experience, qualifications, registrations and licenses to advise? 


To my way of thinking using a ‘Financial Coach’ who has no experience, qualifications, registrations or licenses in financial fields is akin to paying a sports coach who has played football all their life to coach a girls netball team.  Why would you pay financial coaching fees to someone who is not able to provide financial planning advice, tax advice, or finance advice?


So who do you turn to for Financial Coaching Services? 


If you are seeking financial coaching services or financial coaching packages you would be wise to turn to professionals or a professional advisory firm that are experienced in their field of advice, and licensed, qualified and registered with professional bodies such as NTAA, CPA, FBAA, MFAA, PIPA, PIAA.



Coaching and mentoring program's


So when looking for Financial Coaching Services I think I have made my point clear enough that the individual or business should be experienced, qualified, licenced or registered.  I also think you should be looking for and individual or firm that offers financial coaching software, financial coaching tools and financial coaching packages.   Coaching and mentoring program's can greatly assist you develop wealth creation strategies.


Financial coaching fees can be worth paying if the financial coaching fees are paid to suitably qualified professionals whose advice can greatly assist you create personal wealth.  Financial coaching fees can be reduced via subscribing to coaching and mentoring programs and financial coaching packages as these tend to be cheaper than one on one financial coaching services.  However coaching and mentoring programs and financial coaching packages as they are not one on one take more commitment as you have to be self-disciplined enough to follow the coaching and mentoring programs and financial coaching packages.



What if you are looking for the coaching definition business?


If you are seeking financial coaching for business there is once again no accepted coaching definition business. Some business coaches talk about leadership coaching definition, performance coaching definition or executive coaching definition.  But once again nowhere in all these definitions or explanations do you actually find a requirement for a coach who is holding themselves out to be a business coach to be experienced, qualified, licenced or registered.  


Personally I would not take business advice from someone who is not, at the very least, a CPA, NTAA of Chartered Accountant and preferably someone who is also a Registered Tax Agent.


What is the purpose of coaching?


As explained above coaching is ‘training or development in which a person called a "coach" supports a learner in achieving a specific personal or professional goal’. In terms of Financial Coaching Services financial coaching means to coach a client on their personal finance issues which should include topics such as

  • Protection against unforeseen personal events, as well as events in the wider economy
  • Transference of family across generations (bequests and inheritance)
  • Effects of tax policies (tax subsidies and/or penalties) on management of personal finances
  • Effects of credit on individual financial standing
  • Planning a secure financial future in an environment of economic instability

All of these topics require the financial coaching services person or business to be suitably experienced, educated, registered and licensed.  Don’t sell yourself short or waste your money paying financial coaching fees to someone who is qualified only as a life coach.

Are all Fund Expenses Tax Deductible?

Friday, October 25, 2013

Have you recently seen advertising inviting you to attend a conference or seminar to educate you about self-managed superannuation funds (SMSFs)? Your SMSF pays for the privilege of attending the 'conference' in Australia or overseas and you take a holiday as well, all at the fund’s expense.

You might want to think again and seek advice as to whether this is the type of expense your SMSF should be paying and claiming as a tax deduction.

While it may be possible for your SMSF to get a tax deduction for a range of activities, they must be authorised in the first place by your SMSF’s trust deed.   Also, for any expense of your SMSF to be tax deductible it must be linked to income earning activities of the fund.  No tax deduction is available if the expense is for private or domestic purposes – such as holiday or travel expenses for the trustee which are unrelated to the fund’s income earning activities.  When it comes to expenses that an SMSF trustee incurs for the fund, care needs to be taken so that the expenses relate to the fund's income and not for other purposes which are personal or related to the fund's exempt income (normally its pension income).

Personal expenses may include part or all of the expenses relating to the trustees attending a conference which has both a personal element (such as sightseeing) and an element that relates to the income earning activities of the fund (a SMSF trustee education course).  In cases where the fund pays the personal expenses of the trustees or the expenses are required to be divided between the personal expenses and SMSF income producing expenses there are a number of issues.  The first is that the expenses which relate to personal expenses are not tax deductible for the SMSF but there may be wider implications for purposes of complying with the superannuation laws.

The superannuation law considers if the superannuation fund pays for or reimburses members or their relatives for private expenses then it breaches the rule that the SMSF must operate to solely provide retirement benefits for its members.  These fund activities can also breach the rule which prohibits SMSF members or their relatives using the resources of the fund for private purposes. 

Using the SMSF to pay for private activities in this way exposes the SMSF’s trustees to penalties for breaching the superannuation law.  The fund may be at risk of having the SMSF treated as a non-complying superannuation fund resulting in the SMSF losing its essential tax concessions.  Also, such a breach could result in the SMSF’s trustees being disqualified as trustees.

Unsure of whether fund expenses are tax deductible?

Marketing hype and fantastic offers can often lure SMSF trustees into making decisions that can impact their fund’s compliance. Before your SMSF ends up paying expenses that may not be tax deductible, seek advice from an SMSF specialist.

If you are considering participating in a conference to educate you on SMSFs that also includes a personal element such as an overseas or local holiday, seek guidance on whether your SMSF is allowed to pay for it. Call me for assistance or arrange a time that we can meet to discuss the impact on your SMSF.

 By Catherine Smith

Australian Taxation Office catching up with Technology

Friday, August 16, 2013

Hi All,

This year the ATO are trying to catch up with technology and (seemingly) reduce people calling in to follow up their tax return.

They have launched a free App for both Android and Apple phones.


Apple -



This App also has a handy calculator to help you work out a rough guideline of whether or not your employer is withholding enough tax.

Of course you can do the same things on the ATO website, but some people may prefer to check in on their refund more regularly. Therefore the app can be handy.

Just make sure to protect your TFN at all times as it is highly sensitive information.

ATO Scams

Tuesday, July 23, 2013

If you receive an email along the lines of the email below do not open it.

In fact, do not ever open an email supposedly from the ATO.  The ATO do not communicate via random emails.


Private Health Insurance Rebate Entitlements

Friday, July 19, 2013

Hi all,

It has come to our attention with the start of the new tax season that many people were not aware that the private health insurance rebate is now means tested.* Generally from 2013 if your income is greater the $168,000.00 for a couple with no dependents ($84,000.00 for a single) then your only entitlement to a rebate from the government may be reduced, unlike in previous years were it was 30% across the board.  Additionally, the percentage of rebate you are entitled to reduces as income moves between the various tiers - please see table below:


Entitlement by income threshold 2012-2013.

(Australian Taxation Office)


The difference between the rebate you claimed and the rebate you received is calculated as either refundable or payable on lodgement of your return, dependant on if you over or under claimed. Please update your information with your private health insurer if you know you are claiming more rebate then you are entitled to.


The ATO have developed a helpful calculator to help you work out the rebate you are entitled to for the 2014 financial year.  Please click here to access it. The table for 2014 follows:

Entitlement by income threshold 2013-2014.


(Australian Taxation Office)


*Please note that is general information only to highlight this issue to our readers and clients. This does not constitute advice or take into account your individual circumstance.


Works Cited

Australian Taxation Office. (n.d.). Individuals: Medicare Levy. Retrieved July 7, 2013, from


What to Bring to Your Tax Appointment

Monday, July 08, 2013

Hi all and welcome to the first tax related post for the new financial year.

This time of year we have a lot of people asking us what to bring along to appointments for their tax returns (or email through depending on preference).

Please find below a list of information that we believe should cover most bases when trying to get your documents together.
Please remember though, when in doubt just include it.

Also in this listing are links to our individual schedules and rental property worksheets.

To efficiently provide you with the best service it is beneficial for you to bring the following to your appointment:
o Bank account details (for payment of refunds)

o Previous year’s tax return (if a new WFS client)

o Previous years invoices relating to cost of managing tax affairs (if a new WFS Client)

o Details of interest received.

o Details of dividends received

o All Payment Summaries/Group certificates for the year

o Receipts for (or preferably a summary of) all work related expenses (i.e. union fees)

o Any work related car expenses

o Any work related travel

o Any work related uniform or clothing expenses

o Any work related self-education expenses

o Summary of donations

o    Sale price and Cost base of assets (if disposed of in 2013)

o    Spouse income (if not a WFS client)

o    Summary of child support paid

o Private health fund statement

o Details of medical expenses, if net out of pocket costs exceed $2,120.00
If you intend to claim  please bring:

                o Private health  insurance  summary (of claims, not certificate of cover)

                o Summary of other out of pocket medical expense or receipts for any other medical expenses (not claimed through medicare or private health insurance)

o Any other items that you feel are relevant.


For rental properties:
o Please click here to download our rental property worksheet (1 sheet per property, per year)
              The worksheet is optional, but does entitle you to a 15% discount  if completed correctly.

o Details of all rent received – (rental property management annual summary preferred)

o Details of all expenses including interest

o  Property address and date first earned rental income (if first year with rental property)

o Depreciation report (or list of all capital  expenses)

o Any other items that you feel are relevant.


If you wish to email through your information, please use our individual schedule. You can download it here.

EOFY Tax Planning

Friday, April 19, 2013

Hello All,

Catherine is away at National’s for Dragon Boat racing and I thought I would take this opportunity to hijack her blog and write about tax. It is getting to the point in the financial year where people need to start thinking about end of year tax strategies and how the tax changes implemented for 2013 can really affect them. For example, does the tax free threshold rising to $18,200 mean that you no longer need to lodge a tax return? The ATO have some good calculators available on their website to help you make this decision. But when in doubt remember to ask a professional.

For those in business it is time to look at whether or not you have contributed enough into superannuation for yourself and does the business have enough profit in it for you to contribute more? It also time to make sure if you are a sole trader that you register with you super provider to claim super contribution’s as a deduction in your personal tax.  As we get closer to the end of the financial year (EOFY) we will give you more hints and tips. Please feel free to comment below if you have any questions you would like answered or have anything in particular you are interested in hearing about for EOFY. Remember that now can be the best time to get in and see your accountant for some tailored strategic advice.

That’s enough from me for now but you might see me again posting on Catherine’s blog as we get closer to the new tax season.

Lexie O’Toole

Economic indicators for Property Investment are strong

Thursday, October 04, 2012

According to RP Data, with the exception of economic conditions, most ‘Spring selling season’ indicators for the residential market are stronger compared to this time last year.

Cameron Kusher, RP Data research analyst, says the lead-up to the residential Spring selling season is looking more positive, when compared to the same time last year.

However, Kusher says, the question is whether or not momentum will continue throughout the traditional selling season.

“In Spring we begin to see uplift in listings activity with more properties available for sale and subsequently an increase in auction activity. Spring also sees an improvement in the number of property sales, especially following winter, which is usually a slow period for the housing market,” Kusher says.

“Spring 2011 delivered somewhat of a disappointing selling season with sales volumes across the combined capital cities down by 3 percent, lower than they were in the Spring of 2010 and with no noticeable improvement from volumes in Autumn. The amount of stock available for sale during this period was continually increasing throughout the period to historic high levels and home values were falling across each capital city market,” he says.

According to RP Data, with the exception of economic conditions, most indicators are stronger compared with this time last year.

“Overall, we’ve seen some positive movements for home values with new stock being added to the market lower and each of the vendor metrics (selling time, vendor discounting and auction clearance rates) all showing an improvement,” Kusher says.

Despite a more positive trend for many indicators, when compared with those of 2011 , a comparison with the longer-term trend shows many of these indicators are moving off a low base.

“Overall, the data indicates that generally the housing market is now in a stronger position than it was 12 months ago. Considering this, the Spring selling season should be stronger this year than it was last year. However, in comparison to recent years we would not expect the housing market to power along through Spring in the manner that it has previously,” Kusher says.

2012 Tax Changes - Fuel changes

Saturday, July 28, 2012

Fuel changes

There will be some key changes to fuel tax credits from July 2012. The following rate changes will be affected:

  • Liquid fuels, including diesel, petrol or fuel oil used in some off-road activities
  • The introduction of a carbon charge
  • Heavy vehicles travelling on a public road
  • Gaseous fuels
  • And some blended liquid fuels

When calculating fuel tax credits, you’ll need to use the rate applied when you acquired the fuel.

For more details on fuel tax credits for fuel acquired from July, you’ll need to check out this table here.

Discover How to Build A Property Portfolio The Right Way Right From The Start

Recent Posts